Couche-Tard Plans Could Lead to Hundreds More Stores

While the company repositioned itself for future growth, company executive tells CSNews Online the current economy could create more opportunities.

LAVAL, Quebec -- The realignment of Alimentation Couche-Tard's U.S. business units in mid-January not only allowed the company to maintain its decentralized business model with division centers close to its stores, but also will facilitate growth to the point where each region will have between 400 and 500 stores.

"In our model at Couche-Tard, we think when a division is around 450 to 500 stores, that is the optimum size. Our people are close to the customer and understand the customer," Real Plourde, executive vice president and chief operating officer for Couche-Tard, told CSNews Online. "So when we exceed that number, we look to do just what we announced -- create a new division."

The reorganization created two new divisions, the Southwest division and Gulf division, which will support 223 and 316 stores respectively, said Plourde. The Southwest division, based in Dallas, will be made up of stores in Texas, Colorado, Oklahoma and New Mexico, while the Gulf division, located in Pensacola, Fla., will include stores in Tennessee, Mississippi, Louisiana, Arkansas and the western panhandle of Florida, CSNews Online reported when the plan was announced.

The last time a similar action was taken was 18 months ago, when the company reorganized its Great Lakes and Midwest division, according to Plourde.

The Canadian executive agreed that the realignment will make the company increasingly flexible.

"For a vice president to have 1,000 stores in his hands, it's too many, too many people and too many markets," he said.

The reorganized divisions will take effect May 1. Currently, the company is building its leadership teams for the new regions. Some open positions will be offered to internal staff, who may chose to relocate, while other positions will be open to the market, Plourde told CSNews Online. The company is also seeking out office space and is creating support staff, including new accounting divisions so each region will have their down profit and loss statements and budgets, he said.

When the plan was announced, Plourde said in a statement that the realigned divisions would be positioned for growth opportunities. Plourde confirmed that growth will be focused in the newly created regions, to bring the store count in each to the 400 or 500 mark.

"We are very actively looking in the perspective markets," he told CSNews Online.

Couche-Tard's current store count stands at 3,291 stores, according to its Web site. If all regions expand to support 500 stores, it could mean acquiring more than 700 stores, to reach 4,000 across the U.S.

However, the past 18 months have been slow on the acquisition front for Couche-Tard, due to high prices in the market, he told CSNews Online.

"Our objective is to reach the 500 mark. How long that will take depends on the opportunities of the market," said Plourde, noting that Couche-Tard is "very disciplined" in its financial model, and if the return is not evident, will pass on the purchase.

Still, with the economic downturn in the U.S., that may change. "In our past experience, when the economy is slower, that creates more opportunities," he said. "We see the future as very positive."